* Spot gold briefly broke above $1,400/oz
* Fed Chairman Bernanke calms fears over bond-buying end
* U.S. dollar moves higher vs basket of currencies
(Recasts lead, adds comment after Fed Ben Bernanke testimony)
By Clara Denina
LONDON, May 22 Gold was flat on Wednesday,
giving up earlier gains after U.S. Federal Reserve Chairman Ben
Bernanke warned of the risks of holding interest rates too low
for too long, which boosted the dollar.
Spot gold had briefly broken above $1,400 to a
one-week high of $1,414.25 an ounce after Bernanke said the Fed
needed to see further signs the economy was gaining traction
before removing current measures.
But it failed to hold onto those gains and was little
changed on the day at $1,376.71 an ounce at 1507 GMT after he
also emphasized that inflation continued to run below the bank's
Gold is usually seen as an hedge against inflationary
pressures, which remain low in major markets at the moment,
despite accommodative measures.
"The Fed has been buying bonds since the beginning of the
year and gold hasn't done much, and if you look across the
world, we are indeed seeing monetary easing, but inflation
expectations are dropping," Credit Suisse commodity analyst
Karim Cherif said.
The dollar traded at a fresh 4-1/2-year high against the yen
and a new nine-month high against the Swiss franc after
Bernanke's speech. European and U.S. shares retained gains from
earlier in the day.
The Federal Open Market Committee is to release the minutes
of its April 30-May 1 meeting later in the day.
U.S. gold futures for June delivery were little
changed at $1,378.20 an ounce.
Physical demand remained strong in China, but buying in
India, the world's top gold consumer, has been slowing as its
central bank tries to rein in a trade deficit by cutting gold
and silver imports.
As a gauge of investor interest, holdings of New York's SPDR
Gold Trust, the largest gold-backed exchange-traded-fund,
fell 0.8 percent on Tuesday to 1,023.08 tonnes, the lowest in
more than four years.
Spot silver gained 0.5 percent to $22.47 an ounce,
regaining ground after dropping to 2-1/2-year lows earlier in
Platinum rose 0.5 percent to $1,465.49 an ounce as
supply concerns in South Africa continued and palladium
rose 0.10 percent to $744.22 an ounce.
(Additional reporting by A. Ananthalakshmi in Singapore;
editing by Keiron Henderson and Jane Baird)